Environmental policies and financial performance: stock market reaction to firms for their proactive environmental practices recognized by governmental programs
研究中国国家级环保计划认可的企业，发现股票市场平均反应不显著，但早期认可、示范项目和高污染行业的企业市场反应更大。
Abstract Firms implement proactive environmental practices (PEPs), and governments in developing countries such as China implement environmental policies such as pilot and demonstration programs to promote these PEPs. However, it remains unclear whether and when firms recognized by such governmental programs improve financial performance. Using a sample of 233 firms recognized by a national Chinese government environmental program, event study is employed to estimate stock market reaction of recognized firms. The Heckman two‐stage procedure is followed to examine the moderating effects. We find that the average stock market reaction is not significant. Cross‐sectional analyses indicate that firms with earlier recognitions, recognized for demonstration projects (compared with pilot ones), and operating in more‐polluting industries have greater market reactions, while types of PEPs (internal versus external), export intensity and government ownership (state‐owned or not) do not moderate the market reaction. This paper provides implications for firms about whether and when they should participate in a government environmental program.